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CHARTERHOUSE BANK REVIVAL HOPE HAVE DIPPED.

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High Judge Chacha Mwita and Hedwig Ong'undi.

BY SAM ALFAN.

Directors of the collapsed Charterhouse bank have lost in their bid to revive it.

They had sought orders directing Central Bank to provide them with details of a report which informed it’s closure.

Three High Court judges Hedwig Ong’udi, Chacha Mwita, and Mugure Thande turned down the request saying there was no sufficient ground to warrant issuing the orders sought.

“Having carefully considered the application, responses, submissions, the Constitution and the law, we determine that the application for access to the management report cannot be allowed, it is hereby declined and dismissed. Costs being discretionary”, judges said in their decision.

The report in dispute is a management report dated May 6, 2021. It details grounds for recommending liquidation.

Two directors on behalf of the bank, Sanjay Shah and Manoj Shah wanted full details concerning the alleged violation of the Banking Act.

They also sought dates, time, places and persons allegedly involved in the offence, which led to the closure of the bank.

The bank was placed under statutory management in 2006 and later closed over claims of malpractices including tax evasion and money laundering.

The judges also noted that the directors did not comply with the procedures required in the Access to Information Act, while seeking information from CBK but instead moved to court.

“The interim relief sought, if granted, would partially but finally determine a significant component of the suit at this interlocutory stage. We take the inescapable view that there are no special circumstances herein to warrant the grant of the orders sought. We say so fully aware that although the right of access to information should not readily be denied, it is clear to us that given the circumstances of this case, the Applicants will still have an opportunity to argue their case during the hearing and cross examine witnesses on this issue which has also been raised in the suit, so that the court can make a fair determination after hearing all parties”, said the judges.

The collapsed lender had protested the appointment of the liquidator, saying it was made in bad faith given that the alleged severe violations were not stated.

They further claimed that for the last 15 years during which Charterhouse was under statutory management, they have never been given notice of the severe allegations, as directors, or an opportunity to address any of the alleged violations.

They have maintained that the lender never had any liquidity problems and CBK had refused to hand over Charterhouse to its lawful directors despite a restructuring agreement.

CLAIMS AGAINST NCBA BY VEHICLE LEASING FIRM FLOPS.

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High Court Judge Wilfrida Okwany

BY SAM ALFAN.

A local bank has been granted a major reprieve in a leasing tender row with a motor vehicle company.

High Court Judge Wilfrida Okwany declined an application by Vehicle and Equipment Leasing Ltd (VAELL) to compel NCBA bank to pay Sh291 million.

The judge said the firm did not provide sufficient proof that the bank had breached an agreement entered in 2014 for the finance of the vehicles.

The firm had borrowed Sh232 million from the bank to purchase over 200 vehicles from Toyota Kenya.

The vehicles were later leased to Tsushi Capital Kenya Ltd, which then leased them to the government. However, a dispute arose and the firm could not access it’s bank account.

The bank also failed to honour instructions on payment even when the account had sufficient amounts. VAELL said it suffered on accrued charges when the loan was not serviced.

The court heard that the lender was oppressive and aggressively detaining the company’s funds and freezing its accounts and applying charges on the basis of insufficient funds.

However, Justice Okwany dismissed the claim saying VAELL failed to prove the claims it made against the lender.

“I agree with counsel for the bank that the onus of proof was on the plaintiff and it failed to discharge it,” judge Okwany said.

The vehicle leasing firm had argued that as a result of the bank’s conduct, it suffered losses and the vehicles were later sold at low prices.

The firm said the vehicles were returned by police to Toyota in September 208 under unclear circumstances, and the bank allegedly frustrated the sale of the vehicles, which continued to depreciate yet the bank continued to pile interest on the loan.

The firm had sought compensation of Sh187 million arguing that the vehicles, which were disposed of in 2019, were undervalued.

The company also sought the cost of insurance of Sh50 million plus a refund of Sh382 million allegedly debited to the account and which were unlawfully withdrawn.

Further, VAELL accused the bank of erroneously reporting it to the credit reference Bureau, denting its reputation. The court, however, dismissed the claim stating that the lender was under statutory obligation to report.

The court ruled that for a period of three years, the parties had treated the account as a collection account and VAEL could not access it.

WHY CA WANTS SAFARICOM’S APPEAL ON MTR DISMISSED.

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Communication Authority of Kenya Director General Ezra Chiloba./PHOTO BY S.A.N

BY SAM ALFAN.

Communication Authority of Kenya wants an Appeal by Safaricom challenging the decision to reduce mobile termination rates dismissed arguing that views from all stakeholders were taken into account.

The CA Director General Ezra Chiloba argued that the reduction was determined after the necessary procedure and substantive consideration.

Chiloba wants Safaricom appeal dismissed with cost arguing that the impugned MTR’s were determined after the necessary procedure and substantive consideration.

CA through veteran lawyer Wambua Kilonzo, argues that granting relief sought by the Safaricom would unjustifiably fetter the discretion of it granted section 5A of KICA in the exercise of its powers, performance of its functions and objectives of the Tariff regulations.

MTRs are the charges levied by a mobile service provider on other telecommunications service providers for terminating calls in its network.

The CA cut the charge to Sh0.12 per minute from the current Sh0.99 per minute after a six-year freeze.

Safaricom that earns the most from MTR due to its large voice market share of 68.9 percent, challenged the move before the Multimedia Appeals Tribunal. The capping was to start on January 1

CA through veteran lawyer Wambua Kilonzo, argues that granting relief sought by the Safaricom would unjustifiably fetter the discretion of it granted section 5A of KICA in the exercise of its powers, performance of its functions and objectives of the Tariff regulations.

The communication Regulator told the Tribunal that upon requisite public participation, it retains the discretion to ultimately determines the methodology to adopt in reviewing MRTs and FTRs.

“This is consistent with the provisions of section 5A of the KICA that, the CA shall be independent and free of control by government, political or commercial interests in the exercise of its powers, performance of its powers and in the performance of its functions “, lawyer Kilonzo submitted before Tribunal.

Lawyer Kilonzo further told the Tribunal that, Safaricom has not demonstrated the extent to which, if any, that it is not able to recoup its incremental costs for interconnection with other.

“In fact, it has demonstrated that in the years 2020 and 2021, even with the current interconnection rate of Sh0. 99, Safaricom successfully ran a number of promotions and special offers targeting voice services where the effective discounted rate per minute for both on-net and off-net calls is as low as Sh0. 2”, CA told the Tribunal.

The CA dismissed Safaricom argument saying that the impugned MTRs and FTRs promote effective competition and Safaricom has not demonstrated the contrary.

Tribunal heard that from its analysis of stakeholder impact, it was concluded that the lower the voice termination rates would facilitate great retail price flexibility which would facilitate in the overall price levels for mobile services to the benefit of consumers. On the impact on the industry players, CA determined that the proposed revisions would lead to reduced net transfers occasioned by the current imbalanced.

CA’s added that Safaricom enjoys economies of scale and their costs are low compared to other small operators and proposed low termination rate will give small operators greater price flexibility to compete with safaricom.

CA also analyzed the potential impact of the reduction in MTRs on the revenues of three MNOs in Kenya, Safaricom, Airtel and Telkom Kenya ltd using voice traffic patterns for the quarter ended June 30,2021.

DPP TO DECIDE WHETHER TO PROCEED WITH TRIAL OF KEROCHE MINUS AILING HUSBAND.

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Keroche Breweries Ltd Tabitha Karanja with his husband Joseph Muigai/PHOTO BY S.A.N

BY SAM ALFAN.

A Nairobi court has granted the Director of Public Prosecution Nordin Haji time to decide whether to exclude the Keroche Industries chairman Joseph Muigai from a Sh14 billion tax evasion case.

Trial Magistrate Esther Kimeru said it was upon the DPP to decide whether to exclude Muigai from the trial, especially after the case was adjourned because the elderly man was hospitalized.

His lawyer James Orengo told the court that Muigai is admitted at the Karen Hospital and it was his view that he should be excused as the trial proceeded.

Muigai is charged alongside his wife Tabitha Mukami. The court directed the matter to be mentioned on June 14 for directions.

The couple is accused of unlawfully making incorrect statements of their excise duty returns between February 2015 and January 2016, which in turn reduced their company’s tax liability by Sh1.8 million.

They also face a second count of making incorrect excise tax for February 2016 and January 2017, amounting to Sh3.1 billion.

On the third count, they are accused of filing incorrect excise duty books to the tune of Sh3.6 billion, an offence they allegedly committed between February 2017 and January 2018.

The charges read that between 2018 and January 2019, another excise tax entry was unlawfully made which exposed the firm to a Sh2.5 billion liability.

Charges also consist of Sh1.9 billion excise tax which was allegedly to be paid between January and June 2019. They were also charged with omitting Value Added Tax (VAT) returns between 2016 and this year.

Prosecution told the court that between February 2016 and January 2017, Sh551 million was not remitted by the firm to the tax collector, and that between 2017 and 2018 , the amount was Sh613 million.

COURT BARS JUBILEE FROM PRESENTING NOMINEE TO IEBC.

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Jubilee Party Nairobi County Women Representative candidate Wangui B. Ng’ang’a.

BY SAM ALFAN.

Jubilee Party has been barred from forwarding the name of its nominee for the Nairobi Woman Representative position to the Independent Electoral and Boundaries Commission (IEBC), pending the determination of a case filed by one of the aspirants.

Political Parties Tribunal Chairman Desma Nungo issued an interim order restraining President Kenyatta’s Jubilee Party and its chairman from forwarding the name to the electoral body, apart from that of Wangui B. Ng’ang’a.

“Interim orders are hereby issued restraining the 1st, 2nd, 3rd and 4th respondents from forwarding to the IEBC or any other person (other than the complaint, Wangui B. Ng’ang’a) the nomination certificate for the August 9, 2022  Nairobi City County Women Representative elective seat under the Jubilee Political Party,” the tribunal said.

Wangui through her lawyer Harrison Kinyanjui moved to the tribunal accusing Jubilee Party of arbitrarily and unconstitutionally refusing to issue her with a nomination certificate for the post.

She said she has met all the requisite and necessary demands of Jubilee but the party has refused to give her the certificate.

One of Wangui B. Ng’ang’a Billboard.

Wangui further urged the tribunal to bar IEBC from receiving any other name for Nairobi Woman Replacement from Jubilee Party or Azimio La Umoja One Kenya Alliance either sole of joint nomination Certificate, for the August 9, general election.

“There being no other approved or designated nominee for the Jubilee Party, I should proceed to popularize herself as such a nominee so as to sell her agenda to voters,” she said.

Wangui told the Tribunal that she spent Sh8.4million on billboards with Live Ad co. ltd  and has further and additionally spent no less than Sh10 million to establish a secretariat and employed people to popularize her candidature.

STATE OWNED NOCK DIRECTED TO PAY TOTAL KENYA SH38 MILLION FOR BREACH OF CONTRACT.

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Justice Francis Tuiyott who ordered National Oil Corporation of Kenya to pay Total Kenya ltd millions.

BY SAM ALFAN.

National Oil Corporation of Kenya has been ordered to pay Total Kenya Sh38 million for breach of contract.

Justice Francis Tuiyott ordered Nock to pay the oil dealer for failing to deliver the commodity as agreed.

In his judgement, Justice Tuiyott directed Nock to pay USD 192,357.54 for breach of November contract, USD 38,197.8 for late delivery penalty, USD 2,566 for under delivery penalty and USD 94,973 for non-delivery penalty.

The judge ordered money shall be paid in US dollars or on conversion to Kenya shillings at the rates prevailing and set by Central Bank of Kenya on the date or dates of payment are made.

However, the court declined Total Kenya’s request to follow the conversion on special damages that interests shall be at court rates from the date of filing suit to full payment.

The court heard that the two company’s entered the deal in November 2010 for the supply of 7000MT of gasoil.

What was not agreed and falls for determination is whether or not the pricing in the contract was outside the Kenya Open System Tender (OTS) which was explained to be the tender under which the importation and sale of oil products in Kenya is operated.

However, the price was to be five days around the Bill of lading (dates) whereas all other lading charges were to be per the OTS cost buildup.

Aggrieved Total Kenya told the court that Nock unilaterally and arbitrarily abandoned the covenanted price mode and invoiced it at the price mean of USD 96,2562 bbl as opposed to the contractual price mean of 91.5420/bbl .

Total Kenya argued that as a result of the irregular and unilateral act, it overpaid by USD 192,357.54.

But Nock contends that the contract was structured in the same manner as the OTS terms and conditions in which the pricing clause covered the applicable Free on Bond (FOB) freight and premium components.

Nick explained to the court that at the time of tender, there was no certainty as to what as to what would be the FOB basis for cargoes arriving in November 2010 as the ministry of energy had not given clarification as the applicable basis that is whether to peg the pricing on the five days round the bill of loading date or no the whole month average.

Nock stated that in invoking clause 9(a) of the OTS, it choose and applied Deemed bill of lading date and denied overpayment

MP SAYS LINKS BID TO CHARGE HIM WITH LAND FRAUD TO HIS POLITICAL CONNECTION TO DP RUTO.

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Embakasi North MP James Gakuya before Milimani Anti-Corruption court/ FILE PHOTO BY S.A.N.

BY SAM ALFAN.

Embakasi North MP James Gakuya has been summoned to court to face charges related to land fraud.

Gakuya was directed to appear before a Milimani magistrate on Thursday without fail where he will plead to charges of conspiracy to defraud contrary to section 317 of the Penal Code. It is alleged that he conspired to defraud Silvya Merie of a land in Runda.

The MP failed to turn in court on Wednesday saying he had obtained a temporary order from High Court Judge Anthony Mrima, stopping the plea taking.

The legislator said he moved to the high court challenging the decision to charge him arguing that a dispute over the ownership of the land, measuring approximately 0.2020 hectares, is pending before the Environment and Land Court.

“The decision to charge me and the invitation of me to answer to the alleged charge of conspiracy to defraud contrary to section 317 of the Penal Code is another attempt by the Respondents to abuse the criminal justice system,” he argued.

The MP maintained that he is the registered owner of the land and a current search certificate bears his name as proof of ownership.

He said Merie has been laying claim over the same land and using all manner of forums to intimidate him in the hope that he will abandon his claim over the property.

Gakuya said the summons and the charges was another attempt by the prosecution and Directorate of Criminal Investigations to abuse the criminal justice system to arm-twist and intimidate him to drop his claim over the land.

The MP also claimed that the decision to charge him is motivated by ulterior motives and is clearly the executive’s attempt at stopping his candidature because of his political inclination.

He says he has openly stated that he will defend his position as a paid up member of United Democratic Alliance (UDA) and staunch supporter of the Deputy President William Ruto.

Gakuya is separately facing graft charges over the use of constituency development funds.

WOMAN DENIES STEALING LUXURIOUS VEHICLE FROM A KILIMANI MAN.

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Miriam Adhiambo Amboka before Milimani Law Courts where she was charged with stealing Mercedes Benz./PHOTO BY IRENE ONYANGO.

BY IRENE ONYANGO.

A woman has been charged with stealing a Mercedes Benz worth 8.8 million.

Miriam Adhiambo Amboka was accused of stealing the vehicle model GLC 220D from Thambaiya Carnjini Yogeswaran.

It is alleged that she stole the vehicle on November 23, 2021 at Cullinan Apartments in Kilimani in Nairobi, jointly with others not before court.

She denied the charges when she appeared before Milimani senior resident magistrate Caroline Muthoni.

The court freed her after posting a bond of Sh1 million.

SOUTH AFRICAN SUES FACEBOOK OVER EXPOSURE TO HARMFUL IMAGES.

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South Africa National Daniel Motaung lawyer Mercy Mutemi (center), together with other lawyers outside Milimani Law Courts building./PHOTO BY S.A.N.

BY SAM ALFAN.

A South African who was engaged as content moderator for Facebook has sued Meta over violation of his rights and subjecting him to poor working conditions.

In a case filed before the High Court, Daniel Motaung accuses Meta and outsourcing company Samasource Kenya EPZ ltd of subjecting him and his former workmates to unreasonable working conditions including irregular pay, inadequate mental health support, and violation of their rights.

He said he worked in Kenya for six months and said he suffered serious psychological injuries arising from repeated exposure to extremely disturbing, graphic violent content coupled with toxic working environment.

“Content moderation at Facebook has been found to pose a risk to workers’ mental health. Because of their repeated exposure to gruesome content such as beheadings, torture, and rape, a significant number of Facebook moderators’ contract post-traumatic stress disorder (PTSD),” he says in an affidavit.

He wants the court to compel Samasource Kenya EPZ ltd, which trades as Sama and Facebook owners to pay him and his former colleagues for violating their constitutional rights.

He also wants the companies to cater for the cost of lifelong treatment for each current and former Facebook content moderator engaged through the Sama for any mental health problems that they may have developed as a result of the exposure.

“An order that the 1st Respondent accounts for and pays back all the unlawful deductions made from its employees’ salaries and that all current and former employees be provided with their pay-slips from the date of employment to the date of termination of employment or to date,” states court documents.

He wants the high court to issue an order that the respondents to jointly and severally implement at Samasource Kenya EPZ ltd centre in Nairobi a psychological and mental health support system identical to that in Meta Platforms, Inc and Meta Platforms Ireland ltd.

He also wants Samasource Kenya EPZ ltd in consultation with him and all current Facebook Content Moderators engaged through the Samasource recruit a team of at least three independent human rights and psychological consultants to be drawn from a list of independent experts approved by the Court to conduct an internal audit on the company’s content moderation centre in Nairobi.

The independent consultants, he said, will report to the court within thirty days of issuing of this judgement the measures the 1st Respondent must undertake to cease all violations of human rights and to transform the workplace from being a toxic working environment – including the setting of limits on exposure to gruesome and toxic content.

WALUKE AND WAKHUNGU PUT UP SPIRITED FIGHT IN BID TO QUASH JAIL TERMS.

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81-year-old Grace Wakgungu escorted by a police officer./FILE PHOTO BY S.A.N

BY SAM ALFAN.

Sirisia MP John Waluke and his business partner Grace Wakhungu have questioned the legality of sentencing them to jail for a total of 79 years arguing that the judgment was based on extraneous factors.

Through Senior Counsel Paul Muite the duo told Justice Esther Maina there was no criminal culpability on their part because the matter was civil in nature.

He said the payments they were accused of fraudulently receiving were based on an arbitration award, which has never been overturned.

Muite argued that the Sh313 million paid to them payments were sanctioned by the High Court and attempts by National Cereals and Produce Board to overturn the decision was rejected by the Court of Appeal, hence the decision remains unchallenged.

He said NCPB filed parallel proceedings with the Ethics and Anti-Corruption Commission (EACC) after failing to overturn the decision.

“We have read the proceedings and observed, first that the accused persons had identified the maize for importation as there was a requirement to supply maize and they had to secure the maize and there is no anomaly arising from this. Secondly and most importantly we have re-read the proceedings and we find no place where witnesses, including the accused testified that they had acquired the imported maize or stored it,” Muite submitted.

“The sum paid about Sh313,000,000 is less than the “loss of profits” claim and interest on loss of profit by Sh. 2,000,000 In essence, the money the accused are claimed to have fraudulently acquired is yet to be paid. This is because, though the decree did not specify what amounts were for storage, interest or loss of profit, the entire amount received is less than the loss of profit part which was not a subject of the criminal case,” he submitted.

He said the trial court cited very extraneous consideration in finding that the offence of fraudulent acquisition had been committed after dismissing the charges of uttering false document and perjury against the company.

He said that National Cereals and Produce Board (NCB) was in breach of contract entered between it and Erad Supplies ltd as the state corporation did not the company with letters of credit.

Muite urged the trial Judge to find and hold that the conviction was unlawful, illegal and should be set aside.

Wakhungu and Walukhe were convicted and jailed by trial magistrate Elizabeth Juma on account of fraudulently receiving payment of Sh300 million for supply of maize.

The two were released on bail after spending about three months in prison after failing to pay the option of fines which run into billions.